MONEYLENDER AND CLIENT

Otago Witness, Issue 3511, 28 June 1921, Page 24

MONEYLENDER AND CLIENT

THIRTY-SEVEN PER CENT. ALLOWED. CHRISTCHURCH, June 20. The question whether the rate of interest charged by a moneylender was too high came before the Magistrate’s Court. Plaintiff, David Stranaghan, a moneylender, of Christchurch, proceeded against Clement Cannn Derrett, a farmer of Gore, for £155 10s, the amount of two loans, together with a month’s interest thereon. Counsel for plaintiff said his client had charged £2 10s per month interest on the first £SO arid £5 per month on a subsequent £IOO. Later the monthly interest was reduced to £5 10s for the total sum of £lsl. The whole question was whether the rate of interest charged was too high considering tho circumstances. The rate was 60 per cent at first, arid later was reduced to about 44 per cent, on the two amounts together. When the defendant borrowed the money he knew exactly what lie was doing, and made no objection to the amount of interest charged. Plaintiff said all the defendant received of the first loan was £47 10s. Witness deducted £2 10s for the first month’s interest The usual practice where there was no security was to charge interest in advance. He was a personal friend of the defendant, but the loan was an ordinary business' deal and not a mere friendly transaction. The amount of interest lie charged was governed to sornq extent, by Ihe length of time for which the money was lent. Ho would charge un to 120 per cent., if he could go) it. Derrett had paid interest well, until he stopped making payments. Counsel for defendant said the whole transaction was inequitable, and would get worse if allowed to go on. Four rears ,v-e Derrett received £47 10s in cash.‘and two and a-half years ago £95. Since (lie first loan ho had paid £212. nnd vet plaintiff Was still demanding £155. That was. he wanted dose on £4OO for the original amounts advanced. Defendant had actu-

ally paid 20 per cent, on the money, and also repa:d the capital. Defendant wanted to obtain relief as tho situation had become intolerable. The evidence of defendant, had been taken on commission at Invercargill. The Magistrate fixed the rate of interest at 37 per cent, on £150; this added to the principal came to £316 10s. With the sum of £212 deducted for interest, paid over the period of the loan, the amount still owing came to £lO4 10s. Defendant was ordered to pay this amount.